Question

In Australia， during the current income year Ricky who is a resident taxpayer, has the following:
• a gross salary of $78,000 (PAYG tax withheld $16,500),
• a fully franked dividend of $2,000,
• an unfranked dividend of $2,000, and
• a 50% franked dividend of $700.
• no deductions.
• Calculate his taxable income and tax payable

Answer 1

Ans:- Computation of Taxable income and Tax payable are as follows:

Taxable income:

Particulars	( $ )
Gross salary	78,000
Fully Franked dividend	2,000
Franking credit ($ 2,000 x 30/70)	857
Unfranked dividend	2,000
50% franked dividend	700
Franking credit ($700x 50%x 30/70)	150
Taxable income	83,707

Tax payable:

Particulars	( $ )
Tax on $ 83,707	18,752.10
Less: franking tax offset ($857+$150)	(1,007)
	17,745.10
Add: medicare levy (1.5% x $ 83,707)	1,255.605
	19,000.705
Less: PAYG tax withheld	($16,500)
Balance payable	2,500.705

Note: Refund of excess franking credits

Individual taxpayers who are eligible for franking tax offsets are entitled to refund if their franking offsets exceed their tax payable.